September 29, 2011

Judge Sleet: Motion to dismiss based on claim preclusion GRANTED

In LG Electronics U.S.A., Inc. v. Whirlpool Corporation, C.A. No. 10-311-GMS (D. Del. Sept. 29, 2011), LG filed a motion to dismiss Whirpool’s counterclaim of infringement of Whirlpool’s ‘130 patent by LG’s French door refrigerators. Id. at 2. A jury had previsouly found that LG’s French door refrigerators did not literally infringe Whirpool’s patent. LG argued that because its redesigned refrigerators share the same configuration as the refrigerator at issue in the previous action in all material aspects, Whirpool’s counterclaim was barred by res judicata. Id. at 6. Whirlpool argued that LG’s motion should be treated as a motion for summary judgment because it required “consideration of matters outside the pleadings[;]” and that LG did not “meet its burden of showing that the French door refrigerators subject to Whirlpool’s counterclaim [were] essentially the same as those addressed in the [previous] action.” Id. at 7. While granting LG’s motion to dismiss, Judge Sleet rejected Whirlpool’s argument that LG’s motion must be treated as a motion for summary judgment. “Although the court may not generally consider evidence beyond the complaint in deciding a Rule 12(b)(6) motion, when a motion to dismiss is based upon the defense of claim preclusion, the court may take judicial notice of the record in the [previous] action in reaching its determination on LG’s motions to dismiss.” Id.

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September 29, 2011

Magistrate Judge Burke: Motion for Leave to Take Expedited Discovery Granted-in-Part

In Kone Corp. v. Thyssenkrupp USA, Inc., C.A. No. 11-465-LPS-CJB (D. Del. Sept. 26, 2011), Magistrate Judge Burke granted-in-part the plaintiff's motion for expedited discovery in connection with the plaintiff's motion for a preliminary injunction. Judge Burke stated that the appropriate test for evaluating a request for expedited discovery in the context of a preliminary injunction is the "good cause"/"reasonableness" standard, requiring "the party seeking discovery to show 'good cause' for its motion, such that the request is 'reasonable' in light of the relevant circumstances." Id. at 7, 12.

Applying this standard to the facts of the case, the court found that "[t]he circumstances of this case, including its procedural posture, weigh in favor of granting expedited discovery" with respect to the pending preliminary injunction motion. Id. at 12. First, the preliminary injunction motion had already been pending for approximately three months, and the defendants had already filed answers more than six weeks earlier. Id. Thus, "absent the pending preliminary injunction motion, the Court would already have scheduled a Rule 16 teleconference and the parties would otherwise have commenced the discovery process." Id. Second, "because much of the information at issue would likely have been turned over anyway by Defendants soon after a Rule 16 conference[,]" expedited discovery was likely to streamline the case. Id. at 13. Third, "expedited discovery is more likely to be an efficient use of the parties' resources when it relates to a pending preliminary injunction hearing, where it can help to ensure a clear and focused factual record." Id.

Although the plaintiff was able to show "a need for discovery relating to certain, circumscribed subject-matter that may illuminate issues at play at the preliminary injunction hearing[,]" Judge Burke found that the plaintiff's discovery requests were "not narrowly tailored." Id. at 14. Thus, the court granted the motion for expedited discovery, but only with respect to "the key disputed factual issue relevant to the P.I. motion hearing[.]" Id. at 15.

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September 20, 2011

Chief Judge Sleet Grants Motion to Amend, Doubling Patents In Case

Last week, Chief Judge Sleet issued a memorandum opinion in LG Electronics U.S.A., Inc. v. Whirlpool Corp., C.A. No. 10-311-GMS (D. Del. Sept. 12, 2011), granting a motion for leave to amend a patent complaint by LG. LG initially brought the ligitation as a declaratory judgment action on one patent (relating to refrigeration technology); Whirlpool counterclaimed on three additional patents. With its proposed amendment, LG sought to add infringement claims for three of its own patents, plus declaratory judgment actions for the additional patents counterclaimed by Whirlpool. Whirlpool opposed the amendment, alleging that the new infringement claims would "unnecessarily complicate the litigation, thereby prejudicing Whirlpool."

The Court granted leave to amend (with little comment), stating that the technology is related, and that a denial of leave to amend "would result in the filing of another lawsuit and would not promote the interests of judicial efficiency." Id. at 3-4.

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September 16, 2011

Judge Robinson: Marginal Relevance of Evidence Outweighed by Risks of Unfair Prejudice, Confusing and Misleading the Jury, and Wasting the Parties' Time

Judge Robinson recently resolved several pretrial issues in Solvay, S.A. v. Honeywell Specialty Materials LLC, C.A. No. 06-557-SLR (D. Del. Sept. 13, 2011), including:

(1) granting the parties' motions in limine to exclude "certain characterizations of Honeywell's [prior art] patent made in satellite patent prosecutions" because "the marginal relevance of the evidence is far outweighed by the danger of unfair prejudice, confusion of the issues, misleading the jury and wasting the limited time of the parties explaining the satellite patent prosecutions" (id. at 1-2);

(2) declining to reopen the issue of the priority date of the asserted patent (id. at 2);

(3) stating that a dependent claim should not be submitted to the jury when it was not discussed in the plaintiff's expert report (id. at 2);

(4) granting "Honeywell's motion for leave to serve an expert witness statement on the disclosure of . . . one of the late disclosed documents that has become a critical issue in the case since the Federal Circuit's decision" (id. at 2-3);

(5) denying Honeywell's motions for reargument "regarding the issue of abandonment, suppression or concealment" (id. at 3-4);

(6) holding that Honeywell failed "to establish a cause of action for inequitable conduct" because Honeywell did not "establish the requisite level of intent" required under the Federal Circuit's recent holding in Therasense (id. at 4-5); and

(7) stating that the issue of equitable estoppel would be tried at a bench trial following the jury trial (id. at 5).

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September 16, 2011

Judge Robinson: Granting-in-part and denying-in-part cross motions for summary judgment Judge Robinson considered whether a district court could correct typographical errors in patent claims

Judge Robinson recently decided Intermec’s motion for summary judgment of noninfringement and invalidity of Palm’s patents and Palm’s cross motion of no invalidity and infringement. Id. at 3. An issue in dispute was whether the district court could correct typographical errors in the asserted claims of Palm’s patents. Id. at 12. Judge Robinson construed the claims to include corrections to the typos, finding that the “errors [were] obvious on the face of the patent, [and] that there [could] be no reasonable debate regarding their correction as discussed above[.]” Id. at 14-15. Judge Robinson went on to grant-in-part each motion for summary judgment, finding that Palm’s ‘803 patent and ‘049 patent were valid and that Intermec did not infringe claims 17, 18, and 22 of the ‘803 patent or claim 17 of the ‘049 patent.

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September 12, 2011

Judge Davis: Claim construction opinion

In an ANDA patent infringement action involving generic versions of Travatan® and Travatan Z®, Judge Davis recently issued a claim construction decision construing disputed claim terms of U.S. Patent Nos. 5,631,281; 6,011,062; 6,503,497; and 6,849,253. Alcon Research Ltd. v. Barr Laboratories Inc., C.A. No. 09-318-LDD (D. Del. Sept. 6, 2011). The following terms were construed:

“borate-polyol complex”
“ophthalmically acceptable antimicrobial agent”
“to enhance the antimicrobial activity”
“aqueous ophthalmic composition”
“prostaglandin”
“enhance / enhancing the chemical stability”
“therapeutically-effective amount of prostaglandin”
“aqueous composition”

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September 12, 2011

Upcoming FBA CLE - TRIAL AND APPELLATE MEDIATION

On September 21, 2011, the United States District Court for the District of Delaware and the Delaware Chapter of the Federal Bar Association will present a Continuing Legal Education program on “Trial and Appellate Mediation.” The program will include a trial mediation panel, and appellate mediation panel and a practicum session.

The morning session will feature both panel presentations. The trial mediation panel will include a discussion with U.S. Magistrate Judge Mary Pat Thynge of the United States District Court for the District of Delaware, Vice Chancellor Donald F. Parsons, Jr. of the Delaware Court of Chancery, Andre G. Bouchard of Bouchard Margules & Friedlander, P.A., and David B. Stratton of Pepper Hamilton LLP. The appellate mediation panel will address the appellate mediator’s perspective as well as appellate mediation from the attorney’s point of view. The speakers for the appellate mediation panel include James M. Amend, Chief Circuit Mediator for the U.S. Court of Appeals for the Federal Circuit; Penny Conly Ellison, Circuit Mediator for the U.S. Court of Appeals for the Third Circuit; Frank E. Scherkenbach of Fish & Richardson; and Nancy Winkelman of Schnader Harrison Segal & Lewis LLP.

The afternoon session, featuring a practicum focused on mediation skills, will begin immediately after lunch. As part of this practicum session, Magistrate Judge Thynge will conduct a mock mediation based on a wrongful death case previously mediated by the Court. The practicum is designed to give mid-level associates and other practitioners an opportunity to learn the ins and outs of trial mediation from experienced practitioners, and to ask questions about mediation strategy.

The program has been approved for 6.0 Delaware CLE credits. As always, the program will be free to all members of the Delaware Chapter of the Federal Bar Association. Lunch will be provided at a cost of $15 per person. Space is limited for this program so please email Rocky Kravetz at Robert.kravetz@usdoj.gov if you would like to reserve a spot now.

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September 10, 2011

Judge Stark: "Highly Improbable" Claim Construction Not "Impossible"

Last month, Judge Stark issued an opinion following a July bench trial in The Research Foundation of State Univ. of New York v. Mylan Pharma., Inc., C.A. No. 09-184-LPS (D. Del. August 26, 2011). This is a long opinion with a number of interesting points and findings of fact, and which ultimately found that one of the five patents was both valid and infringed. One interesting portion of the opinion discusses a reversal by the Court from an initial position it took in granting a preliminary injunction:

The Court recognizes there is further tension between today's ruling and the following statement in the preliminary injunction opinion: "It follows that Mylan's argument is that Mr. Ashley, the inventor, expressly defined key claim terms in a manner that had the consequence of excluding from the scope of his patent the very embodiment ofhis invention that his employer intended to practice. There is no support in the record for this highly improbable contention."
* * *

As the instant case proves, "highly improbable" does not mean "impossible." At trial, unlike at the preliminary injunction (or claim construction) stage, Mylan presented a significant amount of evidence that demonstrated that a 40 mg daily administration of doxycycline - either 40 mg once-daily or 20 mg twice daily - does not not significantly inhibit the growth of microorganisms. It follows, then, that Oracea® and Periostat®, despite being identified as preferred and "especially preferred" embodiments of the Ashley Patents, respectively, are not actually embodiments ofthe asserted claims. Although unusual, this is the conclusion compelled by the record developed at trial.

Id. at 46-47. View the full opinion after the fold.

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September 10, 2011

Judge Baylson: Motion to Dismiss GRANTED

In Silicon Economics, Inc. v. Financial Accounting Foundation, C.A. No. 11-163 (D. Del. August 17, 2011), Judge Baylson granted a motion to dismiss for lack of standing, after the plaintiff failed to show an actual injury.

The originates from the terms of service of the website of the Financial Accounting Standards Board ("FASB"). The founder of plaintiff Silicon Economics, Inc ("SEI"), Joel Jameson, apparently submitted comments to the FASB via its website; those comments included the idea that resulted in the patent at issue, which covers an accounting "equation." Id. at 2. Later, Jameson realized that the terms and conditions of the website included a clause granting the FASB a license to use information and ideas submitted "for any purpose." Id. at 3.

After noticing the terms, Jameson contacted the FASB; SEI now alleges that the FASB claimed an ownership interest in the patent. In response, SEI filed the present action (after attempting one in California), and asserts Sherman act claims, as well as California law unfair competition claims.

The Court dismissed all of the claims. SEI has no standing, because it cannot show any actual injury -- the only alleged injury was to its reputation, but it provided no specifics. Further, it failed to allege sufficient facts in favor of its anti-trust claim, because it failed to show that the challenged conduct (the seeking of public comment) was commercial in nature. The Court did, however, grant leave to amend the complaint to address these issues.

Interestingly, the Court noted that counsel for the Defendants has "unconditionally renounced any ownership interest" in the patent. Id. at 17-18. Therefore, according to the Court, the "positions of the parties should be amenable to a settlement," and that "prolonged litigation . . . do[es] not seem to be necessary." Id.

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September 7, 2011

Special Master Poppiti Recommends Reduction of Sanctions Award

In Apeldyn Corp. v. AU Optronics Corp., C.A. No. 08-568-SLR (D. Del. Aug. 29, 2011), Special Master Poppiti recently recommended that plaintiff's requested sanctions award be reduced from $89,747.54 to $47,241.54. Id. at 1. In determining the adequacy of documentation of Apeldyn's fees associated with responding to an untimely expert report, the Special Master first noted that although "the descriptor 'worked on' [in attorney timekeeping records] is vague in and of itself, as it fails to convey to the reader the precise task being performed by the timekeeper[,]" the declarations at issue included "[a]mple description of specific tasks[.]" Id. at 14. The Special Master did, however, exclude from the lodestar calculation as inadequately documented all of the hours that "group[ed] together duplicative and non-duplicative tasks[.]" Id. at 16. The Special Master further excluded from the lodestar calculation (1) excessive hours in connection with responding to the untimely expert report in light of the fact "that approximately 70% of the [responsive report] is duplicative--in most instances word-for-word--of [the expert's] earlier reports[,]" and (2) the hours of an attorney whose "role, it seem[ed], was to provide backup support" because the tasks he performed were "entirely duplicative of work already done by [other attorneys]." Id. at 17-19.

Next, addressing Apeldyn's fees in connection with bringing the sanctions motion, Special Master Poppiti stated that the motion "did not involve complex issues of law, and Apeldyn did not cite any case law in its letter briefs, indicating that intensive legal research was not done." Id. at 21. Thus, "[g]iven the straightforward issues involved, the brevity of the letter briefs, and the absence of case law in the briefs," the Special Master excluded all excessive hours from the lodestar calculation. Id. at 21-22.

Finally, Special Master Poppiti stated that "Apeldyn is not entitled to receive reimbursement for fees or costs incurred in connection with preparing the June 27 Bill of Costs" because "Apeldyn did not request such fees in its first submittal on June 27, 2011" and therefore "Apeldyn . . . waived any opportunity it once might have had to seek reimbursement for such fees." Id. at 24. Further, Apeldyn's "June 27 Bill of Costs lacked sufficient documentation[,]" and thus "it would be unfair to reward Apeldyn for preparing what the Special Master concluded to be a deficient submittal." Id. at 24-25.

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